There we go to one more acronym. A manager’s life is really like that: an alphabet soup. It’s PDCA here, SWOT there, CEO up, SaaS down… only to mention some. Now, if you don’t know this one, it’s worth it to free up space in memory. Because the KPI dashboard is a celebrated management tool that measures the performance and success of your company.
The subject has to do with the visual management we’ve previously mentioned in this article. Do you remember? A methodology whose principle is to share with all employees and collaborators, on a clear and concise basis, at an easily visible place, relevant information on the current performance of a company – as well as each sector it is included in.
Well, KPI dashboard is one of the features of this tool. With the KPI dashboard you can realize what is working and what is not, in addition to making the required changes in order to reach the goals established.
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What exactly is KPI?
KPI is an English acronym for the well-known Key Performance Indicator. Also, it is known as KSY, which stands for Key Success Indicator. They are metrics that you elect as essential to evaluate any process in your management.
Or, also: indicators that you, as a manager, will set in order to track the operations’ evolution. Therefore, you avoid getting lost amid a huge amount of report and data leading nowhere. It’s through such indicators that you will keep focused on pursuing the targets.
And the dashboard is the way how the KPIs will be visualized by managers and employees. It may be a panel, a dashboard, a TV set or any other format you choose. The important is to make it so that the key staff of a specific project may access it easily.
The idea here is to share the KPIs which will measure the success of a process. All to make the whole team aware of what really matters in terms of management.
Any example to elucidate?
Sure. Let’s imagine that your business is an e-commerce for cell phone accessories: a potential KPI would be the number of website visits which is really converted into sales.
Or let’s suppose that you run an elementary school. In this case, a KPI would be the percentage of your students approved in distinguished universities. They are the data that precisely indicate if the company is on the right track, heading toward the goals set.
And, how to apply KPIs in practice?
As a matter of fact, there are some distinct categories of KPIs. Among them, we can mention the most relevant:
Productivity KPIs: refer to the productivity of each employee per hour worked and man/machine. That is, they correspond to the use of the company’s resources from the evaluation of deliveries.
Quality KPIs: help understand any deviation or non-conformity occurred during a productive process. They must always be next to the productivity KPIs. An example may be the amount of complaints received for a service during certain period of time. Such amount must be compared to the acceptance level achieved by the very same service.
Capacity KPIs: Key Performance Indicators which measure the response capacity of a process. An example is the amount of products that a machine can pack during certain period of time.
Strategic KPIs: those working as a compass. With them, managers find out where the company is compared to the goals previously set. These KPIs show the way and provide a comparison of how the company’s current scenario is against what it should be.
I think I need more practical examples
So, let’s see examples of KPI dashboard that can be used for you to track closely your company’s performance.
Sort of like your average ticket. It is an indicator that allows to understand how the sales dynamics work, right? And that can be monitored via three parameters: sales, client and vendor. They allow you to check the performance of the sector on a wide basis. In addition, you can detect which type of action may improve processes, as well as the issues to be adjusted.
Just reminding you that the average ticket is calculated as follows: Invoicing in X months divided by X – and this outcome divided by the number of clients.
An example: if you are able to measure the average ticket per clients, you will know which ones purchase more and better. And you will be able to enhance the service rendered to them, thus building customer loyalty.
Now, if you track the average ticket per vendor, you are able to identify, for instance, which professionals do better. From then on, it’s worth it to investigate the reasons for this success, in order to enable those who have not reached it yet.
Here comes the relevance of the KPI dashboard. It’s where will be located the indicators that will allow other vendors to be engaged and motivated, for example. Runrun.it is a tool that can support this process, as it provides managers and employees a real-time tracking of the progress of any activity in the company.
What about the sales?
Oops! We haven’t skipped it! Upon the value of the average ticket, the third decisive KPI for your management can be the success rate of sales.
With this KPI you check what the win rate is in each transaction performed by the company. It can be measured by establishing the relation between the amount of sales effectively closed and the total amount of opportunities opened at certain period.
Finally, a last KPI that can be decisive is the turnover rate or the level of turnover among your employees. Evaluating this KPI can help understand the company’s internal mechanisms. High turnover rates may point to leadership, corporate atmosphere and employees’ recognition issues. And when the company faces matters of such a nature, the customer service will surely be affected.
You can calculate it based on the average time each employee remains in the company. The classical formula is: (no. of hiring, + no. of termination)/2, divided by total employees.
A tool to help build the KPI dashboard
In short, the KPI dashboard places the control in your hand. And, with Runrun.it, this control is even larger. The tool provides you a real-time monitoring of all demands and projects under execution, both for leaders and for employees. In the end, everyone will be engaged in the same goals, with no waste of time and resources. And, even better: focused on the path you plan for the company’s growth. Free tool testing: http://runrun.it
